Transient Accommodations Tax Continues To Be a Threat to Owners

Transient accommodations tax (TAT) proposals continue to pop up on local and state legislative agendas around the country keeping ARDA State Affairs & ARDA-ROC busy.

Operating on deficits, state legislatures see TATs as way to generate revenue. Despite these efforts, Hawaii is currently the only state to tax timeshare owners occupying their own unit, or exchange guests occupying a unit swapped with another owner.

ARDA and ARDA-ROC’s position continues to be that the use of a timeshare unit by an owner or exchange guest should not be taxed like a rental, and we oppose efforts to impose such taxes on an occupancy that generates no revenues. From time to time, we will need to immediately inform impacted owners in specific states or local jurisdictions to voice their concern to local lawmakers. It is our intent to keep HOAs informed of legislation so should the need arise, we can quickly mobilize owners.

For those who would like further information on the issue of TATs and the impact on owners, developers and vacation products in general, a policy brief is available on ARDA-ROC’s website.

Progress Continues on Transfer & Relief Company Regulation

We at ARDA, and as an industry, continue to pursue solutions to help solve the growing problems with illegitimate transfer companies and the far-reaching consequences they have on HOAs and owners.

There are challenges beyond finding an illegitimate company after it has taken money from unknowing owners. HOAs are burdened with unpaid and uncollectible fees and taxes from the timeshare property, while significant time and money must be spent by the HOA on the foreclosure process to recapture the interest. Maintenance fees rise to deal with the problem, leading to more and more delinquent owners, and the possibility of HOA bankruptcy. As a result, the effect on owners leads to negative perceptions toward the resort or HOA.

To date, ARDA-ROC has successfully lobbied for legislation in four states—Colorado, Florida, Nevada, and Texas—with similar legislation pending in Massachusetts and South Carolina. Legislative solutions include the requirement of a written agreement between a consumer and transfer company, escrow for any payment of upfront fees by a consumer, and serious penalties for someone who knowingly transfers a timeshare interest to a person or entity with no intention of meeting its ownership obligations.

ARDA’s State Affairs team continues to work with state legislators and regulators to ensure that any enforcement mechanism (legislative or otherwise) gives proper protection to timeshare owners as well as legal consequences for the companies participating in bad business practices. Click here to learn more about ARDA-ROC’s position on this issue and others.